GlaxoSmithKline Chief Executive Officer Emma Walmsley faces renewed calls for her ouster after Bluebell Capital Partners has taken a £10 million (about $13.7 million) stake in the company.
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GlaxoSmithKline Chief Executive Officer Emma Walmsley faces renewed calls for her ouster after Bluebell Capital Partners has taken a £10 million (about $13.7 million) stake in the company. Bluebell is urging the company board of directors to initiate a search for a new CEO ahead of the company’s 2022 split into a pharmaceutical-focused business and a consumer health business.
Bluebell’s calls mirror those made by activist investor Elliott Management, which called for Walmsley’s ouster earlier this year. Elliott Management has a much significant stake in GKS than Bluebell. Its calls to have Walmsley set aside as the company moves forward with its plan to split into two entities were beaten back by the board of directors this summer in an open letter that supported Walmsley’s leadership.
In a letter to Jonathan Symonds, GSK’s chairman of the board of directors, Bluebell called for Walmsley’s replacement and additions to the board with greater scientific experience, similar to calls Elliott Management made. The argument made by Bluebell, according to The Guardian, is that Walmsley has less pharma experience than her counterparts at other large companies within the industry and that is causing the company’s “disappointing” financial performance. When the pharma division divests from consumer health, Bluebell said new management needs to take over.
“New GSK deserves the right leadership, able to review and potentially adjust the strategy outlined in June, ensure high quality execution, and rebuild trust with employees, customers, suppliers, and shareholders,” they said in the letter, according to the report.
Bluebell said Walmsley’s lack of industry knowledge has been evident during the numerous investor updates made over the past year. The investor group said those updates were opportunities for Walmsley to “show strong leadership and dispel this perception,” Bloomberg reported.
The Guardian added that Bluebell also urges the board to find a buyer for the consumer health business.
While Symonds plans to meet with Bluebell representatives to discuss their concerns, a GSK spokesperson told The Guardian that the board is confident in its current strategies and leadership team.
“Under Emma’s leadership, the board expects the team to deliver the new ambitions set out at our investor update in June, through separation and in the years beyond,” the spokesperson said.
Walmsley took over as CEO of GSK in 2017. Prior to her job at the head of the company, she was in charge of GSK’s consumer health business. Before coming to GSK, Walmsley spent 17 years at L’Oréal, where Walmsley held several managerial positions. While she does not have the scientific background that her counterparts at other top pharma companies do, she has brought in top scientific talent to the leadership team, including Chief Scientific Officer and Head of Research and Development Hal Barron.
GSK’s split is set for the middle of 2022. Earlier this summer, Walmsley outlined the projected de-merger of the two GSK businesses. During her presentation, Walmsley said the standalone pharma business, currently dubbed New GSK, will have projected revenue of about $46 billion by 2031. Over the next five years, she said New GSK will have consistent growth of more than 10% operating profit.
New GSK will focus on four core therapeutic areas: infectious diseases, HIV, oncology, and immunology/respiratory. It anticipates growth from specialty medicines and vaccines. Currently, GSK has a pipeline that consists of 20 vaccines and 42 drugs. Many of these are believed to be potential best- or first-in-class opportunities for the company.
